Lignite, also known as leonardite, mined lignin, brown coal, and
slack, is an important constituent to the oil well, drilling industry. Lignite, or
leonardite as it will be referred as hereafter, is technically known as a low rank coal
between peat and sub-bituminous. Leonardite was named for Dr. A.G. Leonard, North Dakota's
first state geologist, who was a pioneer in the study of lignite deposits. Leonardite is
applied to products having a high content of humic acid. Humic acid has been found to be
very useful as a drilling mud thinner.

Leonardite came into
wide usage when introduced as a replacement for quebracho in 1947. Quebracho was imported
from South America and widely used as a

Leonardite is mined from shallow beds with front-end loaders.

drilling mud thinner until restrictions during World War II caused this import to suffer. Since
this time leonardite has gained acceptance as having some qualities as a fertilizer due to
its high humic acid content as well as a drilling mud thinner.

Black Hills Bentonite entered the leonardite business in 1987 with
the acquisition of reserves and the building of a processing plant. The plant is near the
town of Glenrock, Wyoming, with the reserves approximately ten miles north of that
location.

Black Hills Lignite, LLC, sells custom packaged leonardite products
to all the major drilling fluids companies. these products are sized, packaged, and sold
in various different ways. Leonardite can be processed into a granular form down to a
powder. Leonardite is packaged into 50 lb. sacks, up to 2000 lb. sacks. Leonardite can be
shipped by rail, bulk or bag as well by truck. We look forward to providing continued
service to the leonardite markets of today and that of the future.